Your Foundation for Tomorrow
Real estate has proven to be one of the safest and most stables forms of investment over the past years. Asset accumulation is made inflation-proof by steady returns through rental payments, and the registration in the land register. This form on investment can last for generations.
In the words of US President Franklin D. Roosevelt: “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”
What Is the Best Way to Invest in Real Estate?
The Most Important Information at a Glance:
| Owner-Occupier | Rental Income | |||
| Investment of €250,000 | Condominium | Anlegerwohnung | Property Funds (SCPI) | Bauherrenmodell |
| Annual net rental income | 0 € (but money saved by not paying rent) |
ca. €5,000 | ca. €12,500 | ca. €5,000 |
| Subsidies as additional income (period: 20-25 years) | €0 | €0 | €0 | ca. €125,000 |
| In other words... | You pay the full price | You pay the full price | You invest only about one third to half of the moeny but receive the same amount of rental income | You buy property for "half the price" |
| When is an exit (=selling) possible? | Always Please note: real estate income tax |
After you have made profit | Always Please note: liquidity risk |
After you have made profit |
| Since 2024: Deadline for making profit | - | "Small" Letting: 25 years + 3 years construction | - | "Big" Letting (=percentage share in the property): 30 years + 3 years construction "Small" Letting (=Parifizierung): 25 years + 3 years construction |
As always in the field of investing, you have various options. You can, for example, choose a Bauherrenmodell or Anlegerwohnung, forms of Build-to-Rent for private investors, or a real estate fund invested in tangible assets. Each option comes with advantages and disadvantages. Investing in tangible assets has proven to be one of the most successful investment opportunities in the past and will probably continue to be in the future.
State benefits and subsidies are an important aspect when it comes to investing real estate. Renovating properties is becoming increasingly popular in cities. This supports sustainability and sustainable development, as it prevents further soil sealing. Subsidies are often based on social-economic and ecological factors (e.g. heating, water treatment, insulation, renewable energy).
The site’s location also plays a vital role when choosing a property to invest in. Living farther outside the city or having a garden has become the dream of many in recent years, increasingly so due to the Corona pandemic. Connection to public transport should also be taken into account.
While one would certainly aim for the best possible location for one’s own condominium, it is necessary to compromise on the location for your real estate investment.
- Bauherrenmodell: up to 30 years + three years construction process
- Anlegerwohnung & Bauherrenmodeel with assigned residential units: 25 years + three years construction process
Otherwise, you could lose your tax benefits retroactively on the grounds that this project is not an investment, but a “hobby” (ger. Liebhaberei).
Properties in prime locations are very expensive, which makes it almost impossible to make total profit within this period. This means that the best location does not necessarily have to be the best choice for your real estate investment.
All-round Carefree Package for Your Real Estate Investment
Your all-round carefree package as an investor should include: #
- Analysis & Advice: How much capital should be invested when and where?
- Adaptation to individual tax situation: What needs to be discussed with tax representatives?
- Property search: What is the ideal property or project?
- Realisation: exclusively with professional, experienced project developers
- Financing: What are the best financing options and terms?
- Insurance: securing the property with the best possible insurance
- Construction and placement of the entire property
